The Recession’s Gift

Since 1994 to 2007 South Africa had an economy growth of about 6 – 7%. Then just as the rest of the world, we experience a dramatic downturn in 2008 and 2009. Currently I hear our economy is performing just below 3%.

So most of us, having changed gears and drawn our belts tighter, do still feel the effect of the “great recession” as some economist call it. The question arises – how do we respond?

Do we complain? If you want to, go ahead, but it will not change the situation.

Do we long for the wonderful past? Not a very good option as it is water underneath the bridge.

Do we put our heads down and just work ourselves out of this situation? I think this is a good option. It is a step in the right direction.

What I also suggest is that while we work, we also think and learn from the recession, as I belief it has a gift for us.

The gift is that of exposing the worldwide consumerism. Consumerism is a parasitical system at its worst and at its best an immediate gratification syndrome like that of a 2 year old baby.

To stimulate further economic growth the government encourages small business development. This is a good plan as small businesses are the highest employers in the country. We should however also remember the gift of the recession in this plan.

Observing small businesses I see that a lot of them are in business primarily to consume.

In a start-up phase of a business and for survivalist entrepreneurs, this is acceptable. What stands out is the consumption of profits when a business has “made” it. Expensive cars, big houses etc. A wise entrepreneur will wait until his/her business is mature, before they indulge themselves, if at all.

This consumption is not only restricted to business. Unfortunately the mentality also prevails in government and corporations. I am not only talking about the lavish parties that are held. I am also referring to the employees that come to work with a mentality of doing as little as possible for as much as possible.

Too really change this recession around, a fundamental mind shift has to take place in society.

We need to change our consumer thinking (what can I get) to one of adding value (what can I give).

If you consistently add value money will follow.

I take myself for example. Because my cash flow is under pressure, I tend to think carefully if what I buy, will add the most value to my life. If my business does not add value to my clients, I will not have any clients. If the business I am a client of, does not add value, I do not spend my money there anymore.

This is also true for being an employee. If you have a mentality of adding value, constantly asking yourself “How can I improve the performance of my company?” you will be the last person to be retrenched.

My invitation to you then is: Will you take the gift of this recession and use it to add value?

Striving to add value

H

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Entrepreneurs

Entrepreneurs see things before others do. They recognize patterns, form hypotheses and act long before all the data is in. Von Clausewitz described this as seeing through the “fog of war.” When their hypotheses are wrong we say they were hallucinating. When they are right we call them visionaries. The best entrepreneurs pivot on each hallucination until they get it right. – Steve Blank

A National Business Anthem (Part 2)

The second dilemma in terms of employment growth regards aspiring new business. Employment growth in existing business is not enough to build an economy, there should also be employment growth through businesses growth. The problem is that a vast percentage of entrepreneurs cannot come up with the capital to finance their prospecting initiatives. Financial institutes will and cannot set them up as they only have your money to work with and you will probably become horribly depressed to hear one sad Monday morning that you cannot draw money from you bank account as the adventurous manager blew it on another person’s business idea over the weekend. Foreign investors are scarce as the political risk is too high in South Africa and the tendency is still to push the financially successful away rather than to pull the closer. So where, must the finances come from then? These people don’t have fixed assets to put up as collateral or rich relatives to lend a helping hand (Come to think, neither do I). Regional stock exchanges? I doubt if they will deliver in a financially viable pull towards investors, but I could be wrong. In the old days stockvels had value, but you must bare in mind that the environment was less complex and much more “open”. If Gotliep Jones announced in a pub that he had a gold claim and anyone interested could throw in twenty Pounds for x amount of shares, you would probably only loose your money if he did not actually strike gold. The risk is more accessible and you could monitor the activities much closer. If a stranger invites you today to do buy shares in his initiative, it is a totally different story. His business would be much more complex and less transparent than considering the probability of striking gold and secondly,
he could easily run away with your money and you will never ever track him down again.

So, the anthem. We have all the basic elements of the vision, we only have to compile the lyrics and then tone-set them. The chorus is dedicated to the decline of the symptoms of the real problem since they will fall away as the real problem is cured. Here’s my attempt, see if you can improve on it and let’s make it a living reality:

Verse one:

Let us work much more harder – and also so much smarter
Then our products will sell – and things will be well
As businesses will grow – so poverty will go
For households will score – through employing many more
This’ll allow our economy to expand – in our beautiful mother land

Chorus:

Down comes the crime
There simply is no time;
Up goes the health
Followed by more wealth;
There’s so much dedication
Through better education;
All races are so kind
Since money’s colour blind
x 2

Verse two:

Give the hungry not a dish – but equip them to catch their fish
For new business to make a start – let’s think wide and very smart
Allow our systems to adapt – to place them on the map
Good business is contagious – through all the different ages
Entrepreneurs are what we need – to plant the mustard seed

OK so I’m probably considered not ‘all there’, but as the word goes, Langenhoven was not entirely himself either, when he wrote Die Stem. I firmly believe whilst seeking serious solutions to our problems we have to lighten up somewhat regarding our relationships and practices. We cannot really teach anybody not to get AIDS or not to be a racist or not to steal or not to worry, but if we apply our attention to the real leverage points in terms of the ultimate remedy, a sound growing economy, these things will go away as symptoms of the real disease. This country needs an all encompassing holistic intervention touching all corners of society – adapting the education system to expose even the youngest to these business principles so that they can take responsibility and empower themselves since day one; providing parental training so that we set the right example to the little ears who are busy molding their mental models; it’s too late to leave it to business. Japanese students who stayed with families in our country for some time, all reported that they found the working parent to come home complaining about everything at work. Being irritated, wishing it were Friday and thanking God when Friday arrives, craving for leave and early retirement, expressing all these things loudly on a daily basis at home. What do the “little ears” hear? “Work is a bad thing, it is the place where my parents become unhappy. I dread the day I have to go there.” Does the shoe fit? Think about it. In Japan the parents and teachers make a conscious attempt to make the future business people believe that work is a
good thing. Japanese kids are looking forward to this wonderful day and you don’t have to beg or drag them to work. Some key players in South Africa will have to come together to plan this far-reaching intervention to launch a total onslaught on all parties in the economic mix.

For all this we need (maybe a bit less democracy at present and) a vision from the top, a destination … and why not make it alive through an ever-green Business Anthem that will reach all ears at all levels?

By Dr. Deon Mushavi Huysamen:

Published: Management Today – May 2002